<PAGE> 1
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 16, 1998
FPA Medical Management, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-24276 33-0604264
- ---------------------------- ----------- -------------
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3636 Nobel Drive
San Diego, CA 92122
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(619) 453-1000
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
- ----------------------
As previously reported on a Current Report on Form 8-K, on July 19,
1998 and various dates thereafter through August 7, 1998, the Registrant and
various of its subsidiaries and affiliates (collectively, the "Debtors") filed
for protection under Chapter 11 in the United States District Court for the
District of Delaware (the "Bankruptcy Court"). The cases have been consolidated
for the purpose of joint administration and have been assigned to Chief United
States Bankruptcy Judge Peter J. Walsh. The consolidated caption is: In re FPA
Medical Management, Inc., et al. Debtors, Case Nos. 98-1596 through 98-1685.
On November 16, 1998, FPA Medical Management, Inc. and various of its
subsidiaries and affiliates filed with the United States Bankruptcy Court for
the District of Delaware its monthly operating report for the period from
September 28, 1998 through October 30, 1998 (the "MOR"), which is attached
hereto as Exhibit 99.1.(1)
- ---------
(1) The attachments and exhibits referenced in the MOR are not attached as part
of Exhibit 99.1, but are available at the Office of the United States
Trustee and the Bankruptcy Court. In addition, the Registrant agrees that
it will furnish a copy of any omitted schedule or similar attachment to the
Commission upon its request.
Item 7. Financial Statements and Exhibits.
- -------------------------------------------
(c) Exhibits
99.1 Monthly Operating Report for the period from
September 28, 1998 through October 30, 1998.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FPA MEDICAL MANAGEMENT, INC.
By: /s/ Stephen J. Dresnick
------------------------------------
Date: December 1, 1998 Stephen J. Dresnick
Chairman and Chief Executive Officer
3
<PAGE> 4
EXHIBIT INDEX
Number Exhibit
- ------ -------
99.1 Monthly Operating Report for the period from September 28, 1998
through October 30, 1998.
4
<PAGE> 1
Exhibit 99.1
Debtor: FPA MEDICAL MANAGEMENT, INC.
- -------
Case Number: 98-01596PJW THROUGH 98-01685PJW
- ------------
Notes to Monthly Operating Report for the period September 28, 1998 through
October 30, 1998, "Required Attachments":
1. Depository Tax Receipts for payroll tax deposits into tax trust accounts are
included for the month of October.
2. Copies of most of the Debtors' bank statements for the month of October are
attached; copies of the balance of the October statements not yet received from
the Banks and/or Debtors will be forwarded upon receipt. In addition, copies of
unsubmitted Debtors' bank statements in the prior period for the month of
September are attached.
3. The Debtors' most recently filed Income Tax Return was included in a prior
period (July 19-August 28, 1998) filing with the Office of the United States
Trustee.
4. The Debtors' most recent Annual Financial Statements prepared by Accountants
were included in a prior period (July 19-August 28, 1998) filing with the Office
of the United States Trustee.
<PAGE> 2
<TABLE>
FPA MEDICAL MANAGEMENT, INC.
==============================================================================================================================
MATRIX OF REQUIRED ATTACHMENTS / BANK STATEMENTS
<CAPTION>
OCTOBER SEPTEMBER
DEBTORS BANK STATEMENTS BANK STATEMENTS COMMENTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Core Business Units:
Sterling Healthcare Group, Inc. X
California Axminster X
San Antonio (Gonzaba) X
Meridian X
Florida Humana & Clinics X
Health Partners Inc. X
Non-Core Business Units
Orange Coast
North Carolina X
Illinois MSO X October Bank Statements received for one of four
active accounts.
San Diego Corporate
Kansas City
</TABLE>
<PAGE> 3
<TABLE>
FPA MEDICAL MANAGEMENT, INC.
====================================================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
------------------------------------------------
Projected (1) Actual (1) Difference
------------ ------------ -----------
A B C=B-A
------------ ------------ -----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 2,590,245 $ 5,997,778 3,407,533
Cash Receipts:
Fee For Service Billings $ 17,696,113 $ 17,132,890 (563,223)
Claims & Capitation $ 22,939,894 $ 10,009,207 (12,930,687)
Reimbursement $ -- $ 1,581,420 1,581,420
Medicare & Collections $ 1,000,000 $ 1,954,103 954,103
------------ ------------ -----------
TOTAL CASH RECEIPTS $ 41,636,008 $ 30,677,621 (10,958,387)
Less: Cash Disbursements:
Employee & Physician Payroll $ 17,469,446 $ 23,527,990 6,058,544
Catch-up payments to Doctors $ 228,822 $ -- (228,822)
Insurance $ 2,609,072 $ 3,749,725 1,140,653
Claims & Capitation $ 14,435,292 $ 2,566,773 (11,868,520)
Patient Refunds $ 232,000 $ 217,156 (14,844)
Rent $ 1,016,246 $ 2,366,444 1,350,198
Utilities $ 179,500 $ 893,736 714,236
Medical Supply $ 385,000 $ -- (385,000)
Bank Lock-Box Account Fees $ 35,000 $ 854,003 819,003
Other $ 5,975,714 $ 3,138,880 (2,836,834)
------------ ------------ -----------
Total Cash Disbursements $ 42,566,092 $ 37,314,707 (5,251,385)
Net Cash Flow $ (930,084) $ (6,637,086) (5,707,002)
$ --
Financing Charges (2) $ (376,822) $ (346,590) 30,232
Stop Loss Insurance (2) $ (100,000) $ -- 100,000
Professional Fees (2) $ (1,200,000) $ (2,282,884) (1,082,884)
Borrowing from/(Repayment to) HPI $ -- $ 600,000 600,000
Capital Expenditures (2) $ -- $ (50,000) (50,000)
Restructuring Expenses $ -- $ (325,566) (325,566)
Restricted AWS Cash $ -- $ (564,788) (564,788)
Orange Coast Transaction Fees $ -- $ (106,250) (106,250)
Sale of Orange Coast $ -- $ 8,250,000 8,250,000
DIP Loan Borrowing/(Repayment) $ -- $ (4,600,000) (4,600,000)
DIP Loan Proceeds $ 16,661 $ 1,200,000 1,183,339
Orange Coast DIP Re-Borrowing $ -- $ -- --
ENDING CASH BALANCE $ -- $ 1,134,614 1,134,614
------------ ------------ -----------
</TABLE>
1) The projected data reflected herein is based upon the Final DIP Budget
submitted to the Court on July 20, 1998, as amended on August 28, 1998. The
actual data reflected herein is based upon the actual data reported to the Bank
Group in the Weekly Cash Flow Budgets.
2) Amounts for Financing Charges, Stop Loss Insurance, Professional Fees and
Capital Expenditures are generally reflected at the FPA Corporate level only.
Additionally, intercompany transfers occurring between the Sterling Healthcare
Group, Inc. and FPA Corporate are not separately reflected herein.
<PAGE> 4
<TABLE>
STERLING HEALTHCARE GROUP, INC.
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
---------------------------------------------
Projected Actual Difference
----------- ------------ -----------
A B C=B-A
----------- ------------ -----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 7,193,833 $ 3,298,648 (3,895,185)
Cash Receipts:
Fee For Service Billings $15,000,000 $ 14,178,720 (821,280)
Claims & Capitation $ -- $ -- --
Reimbursement $ -- $ -- --
Medicare & Collections $ 1,000,000 $ 1,954,103 954,103
----------- ------------ ----------
TOTAL CASH RECEIPTS $16,000,000 $ 16,132,824 132,824
Less: Cash Disbursements:
Employee & Physician Payroll $12,127,584 $ 12,209,898 82,314
Catch-up payments to Doctors $ -- $ -- --
Insurance $ 1,566,072 $ 1,792,112 226,040
Claims & Capitation $ -- $ -- --
Patient Refunds $ 220,000 $ 193,143 (26,857)
Rent $ 116,806 $ 226,449 109,643
Utilities $ 60,000 $ 73,883 13,883
Bank Lock Box $ -- $ -- --
Medical Supply $ 35,000 $ 3,762 (31,238)
Other $ 1,589,538 $ 1,267,285 (322,253)
----------- ------------ ----------
Total Cash Disbursements 15,715,000 $ 15,766,532 51,532
Financing Charges $ -- $ -- --
Net DIP Advance $ -- $ -- --
Net Cash Flow $ 285,000 $ 366,291 81,291
Intercompany Transfers $ -- $ (5,056,244) (5,056,244)
ENDING CASH BALANCE $ 7,478,833 $ (1,391,305) (8,870,137)
----------- ------------ ----------
</TABLE>
<PAGE> 5
<TABLE>
CALIFORNIA (AXMINSTER)
===============================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
-----------------------------------------
Projected Actual Difference
---------- ----------- ----------
A B C=B-A
---------- ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ 150,750 $ 996,825 846,075
Cash Receipts:
Fee For Service Billings $ 66,000 $ 82,182 16,182
Claims & Capitation $1,118,000 $ 1,116,809 (1,191)
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
---------- ----------- ---------
TOTAL CASH RECEIPTS $1,184,000 $ 1,198,991 14,991
Less: Cash Disbursements:
Employee & Physician Payroll $ 488,000 $ 602,906 114,906
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ 373,000 $ 786,685 413,685
Patient Refunds $ -- $ -- --
Rent $ 105,000 $ 150,062 45,062
Utilities $ 18,000 $ 21,565 3,565
Bank Lock Box $ -- $ -- --
Medical Supply $ 40,000 $ 16,784 (23,217)
Other $ 16,000 $ 34,381 18,381
---------- ----------- ---------
Total Cash Disbursements $1,040,000 $ 1,612,381 572,381
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ 144,000 $ (413,390) (557,390)
Intercompany Transfers $ -- $ (542,920) (542,920)
ENDING CASH BALANCE $ 294,750 $ 40,514 (254,236)
---------- ----------- ---------
</TABLE>
<PAGE> 6
<TABLE>
CORNERSTONE
===============================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
-------------------------------------
Projected Actual Difference
-------- --------- ----------
A B C=B-A
-------- --------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $194,750 $ -- (194,750)
Cash Receipts:
Fee For Service Billings $354,000 $ 243,670 (110,330)
Claims & Capitation $ -- $ -- --
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
-------- --------- ---------
TOTAL CASH RECEIPTS $354,000 $ 243,670 (110,330)
Less: Cash Disbursements:
Employee & Physician Payroll $219,000 $ 191,432 (27,568)
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ 73,062 73,062
Claims & Capitation $ -- $ -- --
Patient Refunds $ -- $ -- --
Rent $ 15,000 $ -- (15,000)
Utilities $ 6,500 $ 4,900 (1,600)
Bank Lock Box $ -- $ -- --
Medical Supply $ -- $ -- --
Other $ 81,000 $ 7,429 (73,571)
-------- --------- ---------
Total Cash Disbursements $321,500 $ 276,823 (44,677)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ 32,500 $ (33,153) (65,653)
Intercompany Transfers $ -- $ 33,153 33,153
ENDING CASH BALANCE $227,250 $ -- (227,250)
-------- --------- ---------
</TABLE>
<PAGE> 7
<TABLE>
FLORIDA (CLINICS & HUMANA)
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
--------------------------------------------
Projected Actual Difference
----------- ----------- ----------
A B C=B-A
----------- ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $(4,068,340) $ -- 4,068,340
Cash Receipts:
Fee For Service Billings $ 757,866 $ 848,540 90,674
Claims & Capitation $ 7,261,691 $ 2,173,881 (5,087,810)
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
----------- ----------- ----------
TOTAL CASH RECEIPTS $ 8,019,557 $ 3,022,421 (4,997,136)
Less: Cash Disbursements:
Employee & Physician Payroll $ -- $ 2,291,123 2,291,123
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ 448,236 448,236
Claims & Capitation $ 4,676,292 $ -- (4,676,292)
Patient Refunds $ -- $ 22,602 22,602
Rent $ -- $ 582,186 582,186
Utilities $ -- $ 308,849 308,849
Bank Lock Box $ -- $ -- --
Medical Supply $ -- $ 348,713 348,713
Other $ 3,116,638 $ 643,475 (2,473,163)
----------- ----------- ----------
Total Cash Disbursements $ 7,792,930 $ 4,645,185 (3,147,745)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ 226,627 $(1,622,765) (1,849,392)
Intercompany Transfers $ -- $ 1,622,765 1,622,765
ENDING CASH BALANCE $(3,841,713) $ -- 3,841,713
----------- ----------- ----------
</TABLE>
<PAGE> 8
<TABLE>
MERIDIAN
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
--------------------------------------------
Projected Actual Difference
----------- ----------- ----------
A B C=B-A
----------- ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $(1,181,513) $ 350,940 1,532,453
Cash Receipts:
Fee For Service Billings $ 500,000 $ 439,125 (60,875)
Claims & Capitation $ 2,539,919 $ 2,610,746 70,827
Reimbursement $ -- --
Medicare & Collections $ -- --
----------- ----------- ----------
TOTAL CASH RECEIPTS $ 3,039,919 $ 3,049,871 9,952
Less: Cash Disbursements:
Employee & Physician Payroll $ 1,700,000 $ 1,704,575 4,575
Catch-up payments to Doctors $ -- $ -- --
Insurance $ -- $ -- --
Claims & Capitation $ 1,050,000 $ 1,091,055 41,055
Patient Refunds $ -- $ -- --
Rent $ 300,000 $ 260,431 (39,569)
Utilities $ -- $ 43,934 43,934
Medical Supply $ -- $ 152,267 152,267
Other $ 340,000 $ 315,421 (24,579)
----------- ----------- ----------
Total Cash Disbursements $ 3,390,000 $ 3,567,683 177,683
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ (350,081) $ (517,812) (167,731)
Intercompany Transfers $ -- $ 439,254 439,254
ENDING CASH BALANCE $(1,531,594) $ 272,382 1,803,976
----------- ----------- ----------
</TABLE>
<PAGE> 9
<TABLE>
SAN ANTONIO (GONZABA)
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
---------------------------------------------
Projected Actual Difference
----------- ----------- ----------
A B C=B-A
----------- ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ (462,500) $ -- 462,500
Cash Receipts:
Fee For Service Billings $ 67,000 $ 229,885 162,885
Claims & Capitation $ 1,584,000 $ 756,375 (827,625)
Reimbursement $ -- $ -- --
Medicare & Collections $ -- $ -- --
----------- ----------- -----------
TOTAL CASH RECEIPTS $ 1,651,000 $ 986,260 (664,740)
Less: Cash Disbursements:
Employee & Physician Payroll $ 750,000 $ 1,602,972 852,972
Catch-up payments to Doctors $ -- $ -- --
Insurance $ 32,000 $ 36,871 4,871
Claims & Capitation $ 429,000 $ 190,746 (238,254)
Patient Refunds $ -- $ 1,411 1,411
Rent $ 126,000 $ 260,281 134,281
Utilities $ 27,000 $ 236,122 209,122
Bank Lock Box $ -- $ -- --
Medical Supply $ 100,000 $ 299,648 199,648
Other $ 25,000 $ 376,373 351,373
----------- ----------- -----------
Total Cash Disbursements $ 1,489,000 $ 3,004,423 $ 1,515,423
Financing Charges $ -- $ -- --
Net DIP Advance $ -- $ -- --
Net Cash Flow $ 162,000 $(2,018,163) (2,180,163)
Intercompany Transfers $ -- $ 2,018,164 2,018,164
ENDING CASH BALANCE $ (300,500) $ -- $ 300,500
----------- ----------- -----------
</TABLE>
<PAGE> 10
<TABLE>
TENTATIVES & CLOSURES
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
----------------------------------------------
Projected Actual Difference
------------ ----------- ----------
A B C=B-A
------------ ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $(11,009,804) $ 1,351,365 12,361,169
Cash Receipts:
Fee For Service Billings 951,248 $ 1,110,768 159,520
Claims & Capitation 10,436,284 $ 3,351,396 (7,084,888)
Reimbursement $ -- $ 1,581,420 1,581,420
Medicare & Collections $ -- $ -- --
------------ ----------- ----------
TOTAL CASH RECEIPTS $ 11,387,532 $ 6,043,584 (5,343,948)
Less: Cash Disbursements:
Employee & Physician Payroll $ 2,112,000 $ 4,925,085 2,813,085
Catch-up payments to Doctors $ 228,822 $ -- (228,822)
Insurance $ 1,011,000 $ 1,399,444 388,444
Claims & Capitation $ 7,907,000 $ 498,287 (7,408,713)
Patient Refunds $ 12,000 $ -- (12,000)
Rent $ 353,440 $ 887,035 533,595
Utilities $ 68,000 $ 204,484 136,484
Bank Lock Box $ -- $ -- --
Medical Supply $ 245,000 $ 32,830 (212,170)
Other $ 780,400 $ 494,516 (285,884)
------------ ----------- ----------
Total Cash Disbursements $ 12,717,662 $ 8,441,681 (4,275,981)
Agreed Cash Adjustments $ -- $ -- --
Less: Interest $ -- $ -- --
Net Cash Flow $ (1,330,130) $(2,398,097) (1,067,967)
Intercompany Transfers $ -- $ 1,386,535 1,386,535
ENDING CASH BALANCE $(12,339,934) $ 339,803 12,679,737
------------ ----------- ----------
</TABLE>
Source: Information reflected above was obtained from the books and records of
FPA Medical Management, Inc.
<PAGE> 11
<TABLE>
HEALTH PARTNERS, INC
================================================================================
DIP Budget
DIP Projected vs. Actual Cash Flows
September 28, 1998 through October 30, 1998
<CAPTION>
For the Period 9/28/98 to 10/30/98
---------------------------------------------
Projected Actual Difference
A B C=B-A
--------- ----------- ----------
<S> <C> <C> <C>
INITIAL CASH BALANCE $ -- $ 5,027,601 $ --
Cash Receipts:
Fee For Service Billings $ -- $ 3,277,586 $ --
Claims & Capitation $ -- $ 3,579,892 $ --
Reimbursement $ -- $ -- $ --
Medicare & Collections $ -- $ -- $ --
--------- ----------- ----------
TOTAL CASH RECEIPTS $ -- $ 6,857,478 $ --
Less: Cash Disbursements:
Employee & Physician Payroll $ -- $ 3,419,903 $ --
Catch-up payments to Doctors $ -- $ 186,755 $ --
Insurance $ -- $ 293,819 $ --
Claims & Capitation $ -- $ 3,558,194 $ --
Patient Refunds $ -- $ 12,045 $ --
Rent $ -- $ 363,381 $ --
Utilities $ -- $ 101,753 $ --
Medical Supply $ -- $ 273,962 $ --
Other $ -- $ 1,153,286 $ --
--------- ----------- ----------
Total Cash Disbursements -- $ 9,363,098 --
Agreed Cash Adjustments $ -- $ -- $ --
Less: Interest $ -- $ -- $ --
Net Cash Flow -- $(2,505,620) --
Intercompany Transfers $ -- $ (622,109) $ --
ENDING CASH BALANCE -- $ 1,899,872 --
--------- ----------- ----------
</TABLE>
GENERAL: HEALTH PARTNERS INC. IS REPORTED FOR CASH FLOW PURPOSES AS A STAND
ALONE ENTITY. THESE TRANSACTIONS ARE NOT INCLUDED AS A PART OF THE FPA
MEDICAL MANAGEMENT, INC. ROLL-UP.
